Business

Steve Kaaru

P2P finance overhauling the financial system in developed countries

Peer-to-peer finance has accelerated in the past decade. With more people becoming aware of the exorbitant charges banks and other financial institutions have been charging all along, they have explored other avenues. Cryptocurrencies have been a god-send for the P2P movement, with the low charges, swift transactions, privacy and ready availability being among the most prominent factors.

In countries where the financial systems aren’t as robust and developed, P2P has found a ready market. In such countries, cash and mobile money are the predominant systems used by the people. The assumption has for a long time been that in the first world countries, the banking system is just as efficient as the emerging P2P pipelines.

However, this has been proven wrong. Countries in which nearly the entire population has a bank account have been just as enthusiastic about crypto-based P2P channels as their peers in the less developed countries.

Paxful, a peer-to-peer crypto marketplace, has been one of the platforms that have seen an upsurge in users in developed countries. According to data shared with CoinGeek, out of the five markets that led in the sale of cryptos on their platform, four were developed countries. These were the U.S., China, Japan and Taiwan.

The U.S. was also the country with the highest number of users on Paxful, with India and the U.K. also being in the top five. The other two were Ghana and Nigeria. Malaysia, Indonesia, Turkey and Israel registered the highest growth respectively in the first half of the year.

The numbers are a clear indication that P2P finance is taking over the world, be it in the Africa where about half of the population is unbanked or in the U.K. where 97% of the population has access to banking services.

One of the factors that have continuously pushed people away from the traditional banking services and into crypto are the high fees the banks continue to charge for slow transactions. While it takes close to a week to send money internationally, with Bitcoin SV (BSV), it takes seconds and at a tiny fraction of the bank charges.

For the longest time, the people have had to adhere to the system laid out by the government, even when such systems are only put in place to benefit a few. There haven’t been any options for the people and those in power have ensured that it remains that way. Cryptos have changed this, giving the people a choice.

Zimbabwe is one of the best examples. Recently, the government banned the use of the U.S. dollar which the people had been using after the country abandoned the use of the Zimbabwe dollar a decade ago. A few years ago, the people would have had no choice but to comply. However, currently in Zimbabwe, the use of cryptos has skyrocketed as people seek a better option to the unstable local currency.

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